When you’re considering your next vehicle purchase, it is common to compare prices between vehicle brands and models. If you’re buying a car in 2023, there’s actually a bigger calculation you should make, the total cost of ownership, over the whole life of the vehicle.
Transport NSW has an online calculator to help you run the numbers.
Determining the TCO for a particular vehicle involves understanding the cash flow impact of ownership of a vehicle over a defined timeframe. There are several inputs into a TCO calculation as outlined in the following table.
| Input | Description |
|---|---|
| Purchase price | The ultimate cash price after all dealer rebates and dealer delivery charges |
| Duties and taxes | Stamp duty, Luxury car tax, registration charges, CTP insurance |
| Subsidies | Any government subsidies provided |
| Running costs | Maintenance costs, Third Party insurance, fuel |
| Pre-sale make-good costs | Costs of vehicle improvements prior to resale |
| Residual value | The depreciated price for which a vehicle is sold at the end of ownership period |
| Finance costs | Any operating or finance lease |
| Holding period | The time between the purchase and sale of a vehicle |
| Accident management fee | Cost of roadside assistance and management of repairs process |
The calculator will ask you to select two vehicles to compare, these could be ICE, they could be hybrid, or EV or any combination, but a common scenario would be something like a mid-size SUV like a Honda CRV, compared to the EV equivalent, a Tesla Model Y.
You’ll need to answer a few questions about your vehicle usage, for the calculation to be tailored to your family’s circumstances. These questions include the distances you travel, and the amount of time your car is at home (and could charge) if you have solar or home battery storage.
I will say the vehicle model selection needs some work, I could only select a 2020 Honda CR-V Vi Auto FWD, nothing more recent and no higher trims.
With the comparison I did, and with my answers, it resulted in a 5-year total cost to own as $46,961 for the CRV. Compared to a 2023 Tesla Model Y Standard Range, which has a 5-year cost to own of $54,437. While there isn’t price parity according to the calculator, the $7,476 difference would be far narrower, if we were comparing apples with apples (a 2023 CRV and higher trim to better match the features of the Model Y standard).
I’d also like to see them add a slider for the time you plan on keeping a vehicle, as the longer you keep an EV as compared to an ICE vehicle, the greater the savings and therefore the lower cost of ownership.
While the upfront purchase price of EVs can be more expensive to buy compared to an internal combustion engine vehicle equivalent, if you look at the whole-of-life costs or total cost of ownership (TCO) of a vehicle, EVs are increasingly becoming a cheaper option, given the significantly lower running costs.
You can access the Total Cost of Ownership calculator here – https://www.transport.nsw.gov.au/projects/electric-vehicles/total-cost-of-ownership
